Cyber pet peeve: hackers stole my crypto account

Scams come thick and fast in the world of crypto – so how do you stay safe?

The crypto world echoes the early years of the Wild West gold rush. People have recognized the potentially enormous returns that can be realized from investing in cryptocurrencies and have leaped in to try and achieve them. But with that interest comes the attention of scammers and cybercriminals, who want as eagerly as individuals do to gain money to take it from victims.

The rise of crypto fraud is never-ending, as we’ve previously reported. It’s a continual risk to crypto investors that their hard-earned gains will be wiped out by phishing and theft that drains their accounts and leaves them with nothing left. The US Federal Trade Commission (FTC) recently warned crypto consumers reported losing more than $1 billion to fraud between January 2021 and March 2022. The average victim lost $2,600.

Similar research by NordVPN in the UK shows that crypto scammers gained £118 million from victims in the first half of the year, a 58% rise compared to the year before. There, the individual average losses were much greater: £36,250 for each person.

The risks involved

So why do people seem to lose out big when it comes to hackers targeting crypto investors? In part, it’s because of how the ecosystem is set up, with decentralized control seen as a boon for those who want to invest in the crypto space. However, that also causes issues, as it means that there is often a large crop of different companies offering services, such as crypto wallets, that may not have the infrastructure and bureaucracy that helps traditional financial companies keep cash safer.

That means that it’s often easier for scammers to spoof emails and messages purporting to be from an official crypto company that then allows them to gain access to your password and, as a result, your savings. Likewise, the flatter hierarchy inherent in crypto companies means that there are more individual points of failure that can go wrong, resulting in people losing out.

For instance, nearly 100 users are suing Coinbase for allegedly overlooking security flaws in their systems that resulted in them losing $21 million in their crypto funds. The claimants say that “scammers directed customers to the Coinbase Wallet because of its terrible security.” It’s a claim that Coinbase denies.

How to stay safe

The reality is that just as the early days of the Wild West gold rush saw people selling fool’s gold, the crypto world is still in its infancy and therefore prone to malicious scams.

There’s no guarantee, in the world of crypto, that your investments are safe. Traditional financial regulatory bodies often warn those involved that they stand to lose all their investment, either through a collapse in the prices or through scams. However, there are measures you can take as a user to try and avoid falling victim too easily.

Probing the propriety of each project is vital to see whether it’s legitimate or not. You can do so by doing research and seeing whether you’re likely to fall victim to a rug pull or not. Likewise, make sure you double-check where you’re storing and sending your investments, as there are plenty of lookalike websites out there designed to try and capitalize on confusion and to fool people into sending things where they shouldn’t.